"We are laying siege to the city!" a group of students chanted as they marched through Rome, while others waved rainbow peace flags and held up banners from a variety of leftist movements.
"We are protesting a one-way austerity that is bringing the country to its knees," said Piero Bernocchi from Italy's Cobas trade union group.
"And it hasn't achieved what it was meant to by bringing down debt," he said, adding: "Meanwhile politicians continue with their privileges."
Police also seized potential weapons including chains, helmets, clubs and cobblestones and detained 14 people ahead of the protest.
Between 3,000 and 4,000 police officers have been deployed for security, local media reports said.
Thousands also gathered in Lisbon and Porto -- the two main cities in Portugal -- to protest austerity measures in the draft 2014 budget.
The slogan at the demonstration in Porto, the capital of the northern part of the country, was: "Against exploitation and impoverishment".
In Lisbon, protesters said they were planning to board 400 buses rented especially to get around an interior ministry ban on marching on foot across a bridge for safety reasons.
This is the first major street mobilisation seen in Portugal since the government unveiled its budget plans on Tuesday, which will hit public servants and pensioners in their pocketbooks.
One of the most contested measures is a plan to cut civil service salaries by between 2.5 percent and 12.0 per cent, as well as reducing pensions for former civil servants by 10 percent.
The cuts would not apply for salaries or pension payments that are below 600 euros (USD 820) gross a month.
Some of the protesters had camped out overnight on Piazza San Giovanni square following a trade union demonstration and transport strike yesterday.